IMF sees deeper recession in Argentina, according to its World Economic Outlook Report

In the framework of the annual meeting of the IMF which was held in Bali, Indonesia, the IMF released its World Economic Outlook (WEO) report on 8 October. According to the WEO, the economic performance of Latin America this year and in 2019 will not be good, considering that Argentina will experience a deeper recession and Brazil is expected to have a lower growth.

Concerning Argentina, the report highlights that its economy will shrink 2.6% in 2018, due to the austerity measures, global growth, and trade war. For 2019, it is expected that the country’s economy will decrease another 1.6%. The figures presented in the IMF’s report were drastically below what the fund had predicted just last April when it said that Argentina’s economy would expand by about two percent over the next year.

Concerning inflation, the IMF expects that Argentina will reach 40.5%, which positions the country among the top five countries with the highest inflation index: 1) Venezuela (2,500,000%), 2) South Sudan (99.4%), Sudan (64.3%), Iran (47.8%) and Argentina (40.5%). In this connection, in the last WEO report published in April, Argentina ranked number 8 concerning the countries with more inflation in the world, and the IMF’s estimations for Argentina’s inflation was 19.2% in April’s report.

For Paraguay, The World Economic Outlook (WEO) estimates a steady and stable expansion of Paraguay's GDP, over 4% for 2018 and 2019. Considering that the Latin American region will growth 0.6% on average for this year and 1.9% for 2019, Paraguay will be one of the countries with the best indexes during these two years. Specifically, the report highlights that Paraguay will growth near 4.4% in 2018 and 4.2% for 2019, surpassing Chile (4.0% for 2018 and 3.4% for 2019) and Peru (4.1% for both years).

As for Uruguay, it is expected to grow this year only a 2% and between 3 and 3.2% for 2019. In addition, the report also highlights that Uruguay will suffer an increase in the inflation index, going from 6.7% (according to the WEO reports published on April this year) to 7.9% for this year.